White House Says Daschle's Tax Failure Was a 'Serious Mistake'

After a closed-door session before the Senate Finance Committee this evening, embattled Health and Human Services nominee Tom Daschle apologized and said his failure to pay taxes was unintentional.

"I deeply apologize to President Obama, to my colleagues and the American people," Daschle said. "I would hope that my mistake could be viewed in the context of 30 years of public service."

The failure by the former Senate majority leader to pay taxes on the free use of a car and driver for several years, first reported Friday by ABC News, complicates Daschle's nomination and erodes the chances that it will sail through the Senate.

Daschle said tonight he did not realize his car service was income and not a gift from a good friend.

After the closed-door session, the Democratic senators on the Finance Committee expressed support en masse for their former colleague.

"There is a completely understandable, rational, reasonable and acceptable explanation" for his mistakes," Sen. John Kerry, D-Mass., said.

Sen. John Rockefeller, D-W.Va., said that everything discovered so far was discovered by Daschle himself. "None of it was intentional, none of it willful," Rockefeller said.

The White House today called Daschle's failure to pay more than $100,000 in back taxes a "serious mistake," but the president still "absolutely" supports his nomination to be secretary of Health and Human Services.

In a letter to Senate Finance Committee chairman Max Baucus, D-Mont., and ranking Republican Sen. Charles Grassley of Iowa, Daschle said he was "deeply embarrassed" and offered up a timeline to explain how he had overlooked taxes on more than $300,000 worth of income he gained through consulting work, including the use of a car and driver.

"I apologize for the errors and profoundly regret that you have had to devote time to them," Daschle wrote.

Baucus issued a statement voicing his support for his former colleague, with whom he has tangled in the past, and said he is eager to move forward with the nomination.

"I have applauded Sen. Daschle's nomination to the post of HHS secretary and my faith in his dedication and qualifications has only been bolstered in recent weeks by our numerous conversations about the pressing need for comprehensive health care reform," the statement from Baucus read.

At the White House, Obama expressed his unequivocal support for his choice to head HHS.

"Absolutely," Obama said today in the Oval Office when asked whether he still supports Daschle.

White House spokesman Robert Gibbs later said that Daschle's failure to pay the taxes was a "serious mistake, one that he caught and remedied. We still think that he is the best person to do health care reform."

A Cadillac and a Driver Lead to Tax Problems

The tax issue centers around a car and driver lent to Daschle by a wealthy Democratic friend, a chauffeur service the former senator used for years without declaring its use on his taxes.

After being defeated in his 2004 re-election campaign to the Senate, Daschle in 2005 became a consultant and chairman of the executive advisory board at InterMedia Advisors.